Executive assistant seeks leniency for testimony against Lochmiller
The executive assistant to the owner of failed Valley Investments will lead a federal jury through the operations of the company headed by a man who had been convicted once for securities fraud.
As a result, Shawnee Carver will have two separate reasons she can plead to a judge as she seeks to whittle down the five-year sentence she faces in the case.
Carver pleaded guilty to one count of conspiracy to commit securities and mail fraud.
Court documents describe Carver as the only nonfamily member with knowledge of the way company owner Philip Rand Lochmiller and his stepson, Philip Rand Lochmiller II, ran the business.
The elder Lochmiller had been convicted of securities fraud in California, but investors never were told of his criminal history.
Carver’s plea agreement makes it clear she will cooperate fully with the prosecution or risk additional charges. The opposite side of the coin is the plea agreement allows Carver to offer her cooperation and testimony as a reason for a lesser sentence.
The younger Lochmiller, who pleaded guilty before Carver did, will be unable to offer any such reason for a lesser sentence.
The plea agreements of the younger Lochmiller and Carver contain provisions in which each can seek lesser terms by citing their willingness to accept responsibility.
Only Carver, however, is seeking to offer an additional reason, her cooperation, as a reason for a lesser sentence.
Carver is “absolutely” going to testify against the elder Lochmiller, said her attorney, Colleen Scissors.
In the agreement, Carver promised to furnish documents and other material relevant to the case against the elder Lochmiller, who faces trial this spring in Denver.
Carver “agrees that she will at all times give complete, truthful and accurate information and testimony and that she will fully and truthfully disclose all information with respect to the activities of herself and others,” the agreement says.
Carver was deeply involved in the workings of Valley Investments, according to the plea agreement.
Lochmiller offered potential investors returns of as much as 18 percent on investments in the business, which was described as developing affordable-housing projects in Colorado, Idaho and Utah. Investors weren’t told, however, that longtime investors were being paid with money from new investors or that money from the investors funded the Lochmillers’ personal spending.
Carver on three occasions notarized mortgage releases on which either Lochmiller had forged the signatures of investors, the plea agreement says.
Between 2000 and 2009, the year Valley Investments failed, the company took in more than $30 million from about 420 investor contracts, the agreement says.
Carver, according to the plea agreement, disputes that she was aware Valley Investments’ total assets were insufficient to repay its investors, but “Carver admits she knew that the specific representations made to the investors regarding the manner in which their investments would be secured were false.”
The plea agreement also said that for their mutual benefit, the Lochmillers and Carver misrepresented the business as a thriving one, “even when Valley Investments was obviously failing as a business.”
Carver’s duties included notifying investors when Valley Investments needed to obtain signed releases of trust deeds.
In doing so, however, Carver furthered the conspiracy by reassuring investors they were sole holders of the trust deeds, and that Valley Investments was regularly selling lots, when in actuality there frequently were multiple holders of the same property, the agreement said.
Carver also worked directly with investors, in one case persuading one to invest $150,000 in February 2009, three months before the company collapsed, the agreement said.
Carver and Lochmiller II are to be sentenced in April in Grand Junction, after the expected completion of the elder Lochmiller’s trial.
While she can seek a lesser sentence on the basis of taking responsibility and for cooperating with prosecutors, U.S. District Judge Philip Brimmer is free to weigh those factors as he sees fit, according to the plea agreement.
U.S. Attorney’s Office spokesman Jeff Dorschner said he couldn’t comment on “possible cooperations” in the case.